How Does Invoice Finance Work With VAT?
The provider advances a percentage of the gross invoice value including VAT. When you receive the advance, the VAT element is included. This means you have the VAT cash available to pay HMRC on time instead of waiting for the customer to pay. On a £12,000 invoice (£10,000 + £2,000 VAT) with 85% advance, you receive £10,200.
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Oliver Mackman
Director, Market Invoice
Oliver leads Market Invoice's editorial and comparison research. With a background in UK commercial finance, he oversees provider analysis, rate verification, and industry reporting across all verticals.
Last reviewed: 6 April 2026